Industry Insights

Three Keys To a Winning Digital Platform Strategy

By Dan Saks / June 4, 2019

Three keys winning digital strategy blog

Digital technology has become so ingrained in almost everything we do that it's hard to imagine life without it. In fact, consulting firm Accenture argues that we are already in a "post-digital era" where "digital-born companies and those completing their [digital] transformations have showered consumers with digital products and services."

Platforms have been the driving force behind this digital deluge. They can help speed time to market, drive innovation and improve the customer experience. "With every company finally converging on the same digital footing there are more digital ecosystems and more potential partners to help companies create holistic experiences," Accenture writes.

But as the consulting firm points out, there's a problem: "These capabilities and advantages are now available to every organization. Digital itself is no longer differentiating."

It's an issue we've seen firsthand at AppDirect. As a platform technology provider, we strongly believe that feature-rich platform solutions are important. However, we also know that success depends on more than just technology. We've helped companies in a range of industries launch digital platforms, and in every case, there was a special X factor—from vertical expertise to an omnichannel strategy and more—that helped make them a success.

So, what exactly does differentiate platforms in today's digital economy? In our experience, a smart, forward-looking approach to platform-based commerce is essential to capturing a competitive advantage. With that in mind, here are three keys to a winning platform strategy.

1. Solve actual customer problems.

"Platform envy" is real, and launching a platform just for the sake of having one almost always fails. "It’s easy to fall for the idea that building a platform is a pathway to success," explains MIT Sloan. "Don’t just be the ‘Uber for …’ Think about how your platform will make new connections."

To do this, focus on building a strong value proposition for your platform that focuses on solving genuine customer problems. This may sound daunting, but the first step is simply to determine how your platform offering will resonate with customers. For example, Microsoft mapped the functionalities of its Office 365 platform against specific company departments, such as sales and marketing, finance and accounting, HR and communications and others to help ensure that it would resonate with a range of customers.

Focus on building a strong value proposition for your platform that focuses on solving genuine customer problems.

2. Plan for constant technology and strategy change.

In the digital economy, being first to market often provides a big competitive advantage. However, as more companies deploy platforms, the ability to test strategies and change direction quickly is becoming just as important.

To be successful, both now and in the future, look for partners who support your ability to sell digital products and services across multiple dimensions—vendors, services, channels and devices. Even if you're not ready now, having the flexibility to engage in this type of multidimensional commerce when the time is right can be a huge advantage.

3. Cultivate a strong digital ecosystem.

It's been said that "platforms beat products every time," but it's time to dig deeper and ask what types of platforms are most successful. The answer? Platforms that sustain strong digital ecosystems of providers, whether developers, resellers or other types of partners, often perform best.

Consider this fact: Seven of the world's 12 largest companies by market capitalization, including Apple, Facebook, Alibaba and Google, are powered by digital ecosystems. Ecosystems allow these companies—and other smaller companies like them—to accelerate innovation at a speed that would be impossible if they operated on their own. One company, even a large one, cannot match the power of hundreds or thousands of people actively working to maximize a platform.

Ecosystems allow companies to accelerate innovation at a speed that would be impossible on their own.

In the business world, one of the best examples of this is The company's AppExchange allows to offer a wealth of innovative add-ons to its core customer relationship management (CRM) product, giving it a clear advantage in the market. In fact, the AppExchange, as well as all of the economic activity it generates, will soon be worth almost five times more than itself.

Today, platforms are well on their way to becoming the solution of choice for companies looking to drive digital innovation, accelerate time to market and deliver a superior customer experience. However, a platform itself doesn't guarantee success. By focusing on these three areas, companies can set themselves apart in a market where digital is everywhere.

Dan Saks is co-founder and co-CEO of AppDirect.

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